India must have few world size banks: Finance Minister

India must have few world size banks -Finance Minister P. Chidambaram.

Finance Minister P. Chidambaram, today said that India must have two or three world size banks.

“Finding new business models will inevitably lead to some consolidation. We should not fear consolidation. I know there is pride and identity, but ultimately some consolidation would have to take place in the banking system in this country,” he said here at the Bancon-2012 meet.

“We must create at least two or three world size banks. China has done it. And if India wants to be and as it will be the third largest economy in the world…we must also have one or two world size banks and some consolidation is inevitable,” he said.

State Bank of India, countries largest Public Sector Bank, has acquired the board approval for the merger of its remaining five associates with itself. It has already amalgamated two of its subsidiaries.

SBI had merged one of its associates, State Bank of Saurashtra, with itself in 2008 besides merging itself with State Bank of Indore in 2010.